Field of the Invention
The invention relates generally to reward cards, and, more specifically, to a system for authorization of reward card transactions.
Description of Related Art
Transaction cards are now used extensively for making payments around the world. Consumers may use such transaction cards to make payments, for example, at retail outlets through a point-of-sale (POS) infrastructure, or over the Internet through online interfaces to payment gateways. Types of transaction cards include, but are not limited to, credit cards, debit cards, and charge cards.
Some transaction cards, such as credit cards or charge cards, offer rewards to consumers for making payments using the transaction card. The rewards may include, for example, reward points, airline miles, money or cash back, gift vouchers, merchandise vouchers, health vouchers, and the like. Such types of transaction cards are referred to herein as reward cards. Usually, reward card service providers offer the consumer a credit limit. The consumer may make transactions up to the credit limit of the reward card, and subsequently pay back the reward card service provider within a pre-defined billing cycle, e.g., one month. If the consumer does not fully pay back the reward card service provider within the billing cycle then the consumer typically incurs a finance charge.
Consumers sometimes spend more through a reward card than they are able to pay back within the billing cycle, and thereby incur additional financial charges. Thus, some consumers may be or become credit averse, preferring not to spend through a reward card in order to avoid being in debt.
Such customers often prefer to use other transaction cards, such as debit cards, for making payments. Typically, these cards are directly associated with a current balance in a bank account of the customer. Transactions made through these cards are immediately debited from the bank account of the customer, and thus they can offer greater financial safety and stability to the customer; use of these cards reduces the need for the consumer to consciously exercise spending discipline. However, in such cases, the customer may lose various benefits, such as, but not limited to, reward points that might have been earned by spending with a credit card or a charge card. Accordingly, there is a need for a solution that combines the financial safety and stability of other transaction cards with the incentives of a reward card.